Premiums for Asian aluminum are set to slip from record highs as China ramps up exports of semi-manufactured products, leaving regional producers searching for buyers for their surplus metal.
Premiums, the surcharge for obtaining physical metal, have nearly doubled in the past two years outside of China after Western producers cut supply due to years of low prices.
A backlog at London Metal Exchange warehouses and financing demand from Western banks earning profit on stored metal also tightened supply.
Following a two-day decline on the LME, the cash price of primary aluminum climbed up 0.3% to end at $1,802 per metric ton on Friday, February 20. After a couple of days of decreasing prices, the Indian aluminum cash price held steady at INR 112.50 ($1.81). On the LME, the aluminum 3-month price showed little movement last Friday, hovering around $1,820 per metric ton.
Chinese aluminum prices closed flat for the day. For the fifth consecutive day, the price of Chinese aluminum scrap held flat at CNY 12,500 ($1,998) per metric ton. The price of Chinese aluminum billet saw little movement at CNY 12,940 ($2,068) per metric ton. The price of Chinese aluminum bar showed little movement last Friday at CNY 13,700 ($2,190) per metric ton. The cash price of Chinese aluminum remained essentially flat at CNY 12,910 ($2,064) per metric ton.